Key points
- The Bluebet share price is struggling today
- Shares are on the way down despite a record quarter in turnover for the company
- Bluebet also exceeded all its prospectus forecasts this quarter
- The company says it is well-funded to fuel its growth vision into the US market.
Shares in online wagering business Bluebet Holdings Ltd (ASX: BBT) are struggling today, down 5.1% to 93 cents each at the time of writing.
It seems investors expected more from the company's earnings update for the quarter ending 31 December 2021 released today.
Bluebet shares slide despite 'record turnover' in Q2 FY22
The company released several investment highlights from the quarter, including:
- Exceeding its calendar year (CY) 21 and 1H FY22 prospectus forecasts for all key metrics
- Record turnover in Q2 FY22 of $138.6 million, up 54.8% year on year
- Melbourne Cup week up 62.2% year on year, delivering new records for weekly turnover
- Q2 FY22 net win of $13.8 million, up 51.6% from the year prior
- First time depositors (FTD) increased 86.9% for the quarter
- BlueBet announced its second market access agreement in the US
What else happened last quarter for Bluebet?
Bluebet ended the period with revenue of $138.6 million – a 55% year on year gain – and a net win of $13.8 million, up 52% from the year prior.
The company also maintained a net win margin of 10% through, it says, a "disciplined approach to managing promotions". This has resulted in a net win margin of around 11% for the 6 months year to date.
Bluebet also exceeded its CY21 and 1H FY22 Prospectus forecasts across all key metrics, according to the company's announcement. These include turnover of $444.6 million, a bet count of 8.8 million, and active customers of 45,087 (up 13.2%) to name a few.
As of 31 December 2021, Bluebet had $55.4 million in cash on the balance sheet, including customer deposits of $3 million.
Aside from that, the company also announced that its wholly-owned subsidiary Bluebet Colorado LLC signed an agreement with The Wild Card Saloon & Casino, a casino operator based in Colorado, USA.
The agreement has a term of 10 years and enables Bluebet to conduct business-to-consumer (B2C) sportsbook operations online in Colorado, pending regulatory approval.
What's next for Bluebet?
The company says that it is well funded to work towards its growth vision and has sufficient cash runway to cover its expansion moves.
It also prepared a prospectus last year in relation to an offer of 70.2 million shares at an issue price of $1.14 per share to raise another $80 million.
The company says it has deployed these funds largely in line with expectations to the designated areas, without any cost blowouts.
It also notes that first bets are expected with its Colorado deal in Q1 FY23, whereas it expects first bets from its Iowa outfit in late March this year.
The company didn't provide any specific earnings guidance in its quarterly update today.
Bluebet share price snapshot
The Bluebet share price is trending down in 2022 having lost around 37% since January 1. This came after sliding 20% in the last week alone.
Zooming out, the company's shares are lagging benchmarks and are down more than 18% in the last 12 months of trading.
